Which underwriting class indicates better-than-average risk with typically lower premium?

Which underwriting class indicates better-than-average risk with typically lower premium?

• A. Preferred
• B. Standard
• C. Substandard
• D. Elite

Answer: (A)

Underwriting classes reflect how risky a insured person is, and premiums line up with that risk. A preferred rating means better-than-average health and risk, so the insurer offers a lower premium than the standard rate. Standard represents average risk with standard pricing; substandard indicates higher risk with higher premiums. While some insurers use terms like Elite for top-tier risk, the test concept is that, among these options, the designation for lower-than-average risk and a lower premium is preferred.

Underwriting classes reflect how risky a insured person is, and premiums line up with that risk. A preferred rating means better-than-average health and risk, so the insurer offers a lower premium than the standard rate. Standard represents average risk with standard pricing; substandard indicates higher risk with higher premiums. While some insurers use terms like Elite for top-tier risk, the test concept is that, among these options, the designation for lower-than-average risk and a lower premium is preferred.